Court rules against Obamacare challenge

Conestoga Wood Specialties has 2 facilities in Snyder County

July 27, 2013

PHILADELPHIA (AP) - A federal appeals court ruled Friday against the Mennonite owners of a central Pennsylvania furniture manufacturing company who claimed new health insurance requirements that they pay for employees' contraceptive services violated their First Amendment rights.

The 2-1 decision issued by a three-judge panel of the 3rd U.S. Circuit Court of Appeals upholds a lower court decision that Conestoga Wood Specialties Corp. does not qualify for the exemption because it is a for-profit company making a secular product with no formal ties to a church or other religious group.

"The law has long recognized the distinction between the owners of a corporation and the corporation itself," the ruling said. "A holding to the contrary - that a for-profit corporation can engage in religious exercise - would eviscerate the fundamental principle that a corporation is a legally distinct entity from its owners."

Conestoga's health plan had excluded coverage for contraceptives and "morning-after" drugs, citing Mennonite Church teaching that terminating a fertilized embryo "is an intrinsic evil and a sin against God." The company argued that the health care law's requirement to pay for birth-control violated their religion, while disobeying it would subject them to crippling fines.

During arguments before the 3rd Circuit last month, Conestoga attorney Charles W. Proctor III told the court that the Lancaster County cabinetmaking firm, that also has facilities in Beavertown and Beaver Springs, was complying with the federal health insurance mandate because it could not afford potential penalties of $100 a day for each affected employee.

A phone message left for Proctor was not immediately returned Friday.

Conestoga employs about 950 people and is owned by Anthony Hahn and his family, who are Mennonite. The employer requirement under the new rules applies to companies with 50 or more full-time workers.

The American Civil Liberties Union, which filed a friend-of-the-court brief in the case, praised Friday's ruling.

"While the Constitution ensures that we are entitled to our religious beliefs, it also safeguards against having someone else's beliefs imposed upon us," ACLU deputy legal director Louise Melling said in a statement. "Businesses cannot deny women coverage for something as fundamental as contraception by using the owners' personal beliefs as an excuse for discrimination."

The Pennsylvania case is among dozens nationwide addressing contraception coverage under the new health care rules. Friday's decision contradicts a ruling made by another federal appeals court in a similar case, increasing the chance that the Supreme Court could eventually intervene to address the issue.